On December 4, Slovakia’s new government approved a tax on banks as part of a set of measures aimed at consolidating public finances and reducing a soaring deficit. The 30% super tax on profits should be effective as of January. The levy is then set to fall 5 percentage points per year to 15% in 2027.
The tax hit means Slovakian banks will lose the ability to generate sufficient levels of capital and fully cover demand for loans, says the country’s banking association. They will also likely be incentivised to pass on some of the additional expenses to borrowers, according to S&P Global Market Intelligence.
